Sunbeam v. Nielsen

No sooner do I post a new paper on the unsettled law and policy of audience measurement than the United States District Court for the Southern District of Florida releases its decision in Sunbeam Television Corp.’s antitrust lawsuit against Nielsen Media Research.

The lawsuit stemmed from Nielsen’s transition to Local People Meters in the Miami-Fort Lauderdale, FL television market back in October of 2008. In its lawsuit, Sunbeam alleged that Nielsen implemented the LPM system despite known methodological flaws that contributed to inaccurate ratings. Further, Sunbeam asserted a range of antitrust violations. Specifically:

“Sunbeam alleges that Nielsen engaged in the following exclusionary and monopolistic conduct: (1) mandating contract provisions that prevent competitors from entering the market; (2) undertaking transactions and business strategies intended to neutralize actual or potential competitors; (3) imposing punitive pricing on customers who resist its practices; (4) utilizing defective ratings data to attract and retain new cable customers, thereby foreclosing a potential avenue of competitor entry; (5) imposing on its customers onerous contract provisions that, inter alia, leave them with no effective contractual recourse in the event of breach and (6) charging noncompetitive prices for its ratings services.”

In short, Sunbeam failed to convince the court that Nielsen had committed any antitrust violations. A key element of this decision was the recognition that the mere possession of monopoly power is not illegal. Everyone — including Nielsen — agreed in this case that the company is a monopoly, at least in the Miami-Ft. Lauderdale TV ratings market.  However, the threshold that needs to be met in an antitrust lawsuit such as this one is whether Nielsen engaged in predatory or exclusionary practices that prevented or exluded competition.  According to the court, Sunbeam failed to prove that this threshold had been reached.

I won’t go into summarizing the details of the decision, but one aspect I found particularly interesting was that, even in the midst all of the analyses and expert testimony associated with this lawsuit, the court could reach no firm conclusion as to whether the LPM was better or worse than the previous audimeter-diary system, or, for that matter, a cable set-top box system. Just goes to show how incredibly difficult  –and, of course, how subjective — it is to make any determinations as to the relative accuracy of different audience measurement systems.

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